Nifty 50: Probable Movement and Critical Levels
1. Market Context and Closing Price
Nifty 50 Closing Price (July 18, 2025): 24,968.4
Recent Trend (June 12 - July 18, 2025):
The Nifty 50 has shown a marginal decline from 25,549 (June 26) to 24,968.4 (July 18), reflecting a consolidation phase after a peak. The index has been range-bound between approximately 24,700 and 25,600 over the past month, with intermittent volatility.
Global Indices:
NASDAQ Composite: Declined from 20,273.46 (June 27) to 19,662.49 (July 18), signaling global tech sector weakness.
Dow Jones: Declined from 44,094.77 (June 30) to 42,967.62 (July 18), indicating broader market caution.
S&P 500: Declined from 6,204.95 (June 30) to 6,045.26 (July 18), reinforcing a bearish global sentiment.The global indices' downward movement may exert mild pressure on the Nifty 50, particularly given its correlation with global markets.
2. Open Interest Analysis
The OI data provides insights into participant positioning, which is critical for understanding market sentiment and potential price movements.Futures OI (July 18, 2025):
DII (Domestic Institutional Investors): Net long with 35,942 contracts, indicating a bullish bias. DIIs have consistently increased their long positions from 28,909 (June 27) to 35,942 (July 18), suggesting confidence in a potential rebound or stability.
FII (Foreign Institutional Investors): Net short with -148,064 contracts, a significant increase in bearish positioning from -33,518 (June 27). This indicates FIIs are hedging or expecting a downward move.
Pro (Proprietary Traders): Net long with 18,132 contracts, a shift from a net short position of -11,740 (June 27), suggesting some speculative buying interest.Total Net Futures OI: -93,990 contracts, reflecting a bearish tilt in futures positioning, primarily driven by FII selling.
Options OI (July 18, 2025):
Total Net Options OI: -397,738 contracts, indicating heavy put writing or call unwinding, which typically suggests bearish sentiment or hedging against downside risk.
FII Options OI: Net short by -199,300 contracts, with significant short positions in both calls (355,235) and puts (260,995). This indicates FIIs are either neutral (selling both calls and puts) or preparing for a range-bound market with downside protection.
Pro Options OI: Net short by -198,438 contracts, with large short positions in calls (949,802) and puts (689,419). This suggests proprietary traders are betting on a range-bound market, writing options to collect premiums.
DII Options OI: Negligible activity (7,570 call long, 14,283 put long), indicating limited participation in options.
Key Observations from OI Data:
FIIs' Bearish Bias: The consistent increase in FII short positions in futures (-148,064) and options (-199,300) signals caution, likely driven by global market weakness and domestic uncertainties (e.g., budget announcements, macroeconomic data).
DIIs' Counter-Bullish Stance: DIIs’ net long futures position (35,942) suggests they are absorbing FII selling, acting as a stabilizing force.
Options Market Dynamics: High put OI and short call positions indicate a market expecting consolidation or a mild downward bias. The put-call ratio (PCR) can be inferred to be elevated (put OI > call OI), a bearish signal but also a potential contrarian indicator of oversold conditions.
3. Critical Levels based on the OI data and recent price action
The following are key support and resistance levels for the Nifty 50:
Support Levels:24,700 - 24,750: This zone has acted as a strong support in recent weeks (e.g., June 23: 24,971; July 14: 24,708). Significant put OI is likely concentrated at 24,700, making it a critical level where buyers may step in.24,500: A psychological and technical support level, reinforced by historical lows in June (e.g., June 4: 24,620). A breach below 24,700 could trigger selling toward this level.24,200: A deeper support level, aligning with the 200-day moving average (approximated based on trend) and significant put OI buildup.
Resistance Levels:25,100 - 25,150: This zone has acted as a resistance in recent sessions (e.g., July 10: 25,112; July 8: 25,522). High call OI is likely concentrated at 25,100 or 25,200, indicating selling pressure from option writers.25,500: A major psychological and technical resistance, aligning with the recent high (June 26: 25,549). A breakout above 25,150 could target this level.25,800: A strong resistance zone, coinciding with the all-time high in the provided data (June 26: 25,549).
Options OI-Based Levels:
Highest Put OI: Likely at 24,700 or 24,500, indicating strong support due to put writing.Highest Call OI: Likely at 25,000 or 25,200, suggesting resistance due to call writing.
Max Pain Level: Estimated around 24,900 - 25,000 (based on balanced OI and recent closing price), where the market may gravitate to minimize option losses at expiry.
4. Probable Movement
The Nifty 50 is likely to remain range-bound in the near term (next 5-7 trading sessions) with a mild bearish bias, driven by the following factors:
FII Selling Pressure: Heavy short positions in futures and options suggest FIIs are anticipating a pullback, possibly due to global market weakness (NASDAQ, Dow, S&P 500 declines) and domestic factors (e.g., budget outcomes, corporate earnings).
DII Buying Support: DIIs’ consistent long positions in futures provide a cushion, preventing a sharp decline. Their buying has historically stabilized the index during FII sell-offs.
Options Market Sentiment: High put OI and short call positions indicate a market preparing for consolidation or a minor correction. The elevated PCR suggests potential oversold conditions, which could lead to a short-term bounce if global cues improve.
Global Influence: The decline in global indices (NASDAQ: -3.02%, Dow: -2.61%, S&P 500: -2.59% over the past month)sony: -2.28%) may add downward pressure, as foreign investors often follow global trends.
Short-Term Scenarios:Bearish Case (Probability: 40%):
If global markets continue to decline or domestic triggers (e.g., disappointing earnings or policy announcements) emerge, the Nifty 50 could test 24,700 or 24,500. A break below 24,700 could accelerate selling toward 24,200.Trigger: Increased FII selling, negative global cues, or high put unwinding.Bullish Case (Probability: 30%):A reversal in FII sentiment or positive domestic catalysts (e.g., strong earnings, favorable budget) could push the index toward 25,100 - 25,200. A breakout above 25,150 could target 25,500.Trigger: DII buying momentum, short covering by FIIs, or positive global market recovery.
Range-Bound Case (Probability: 30%):
The index may consolidate between 24,700 - 25,100, with option writers dominating price action. The max pain level (24,900 - 25,000) could act as a magnet near expiry.Trigger: Lack of strong directional catalysts, balanced OI between calls and puts.
5. Technical Indicators (Assumed Based on Trend):
Moving Averages: The Nifty 50 is likely trading below its 20-day and 50-day moving averages (approximated around 25,200 - 25,300), indicating short-term bearish momentum. However, it remains above the 200-day moving average (~24,200), suggesting long-term bullishness.Relative Strength Index (RSI): Likely in the neutral zone (40-50), indicating neither overbought nor oversold conditions, supporting a range-bound outlook.
Volatility Index (India VIX):
Likely elevated (based on global market declines), suggesting higher market uncertainty and potential for sharp moves if key levels are breached.
6. Recommendations for Traders
Intraday/Swing Traders:
Buy Near Support:
Enter long positions near 24,700 - 24,750 with a stop-loss below 24,500, targeting 25,000 - 25,100.
Sell Near Resistance:
Short the index near 25,100 - 25,150 with a stop-loss above 25,200, targeting 24,800 - 24,700.
Options Strategy: Consider a neutral strategy like an Iron Condor (sell 25,200 call and 24,500 put, buy 25,400 call and 24,300 put) to capitalize on range-bound movement and collect premiums.
Positional Traders:
Wait for a breakout above 25,150 or below 24,700 to confirm directional bias. Use trailing stops to manage risk.Monitor FII/DII activity and global indices for cues on trend continuation.
7. Risks and Considerations
Global Market Influence: Further declines in NASDAQ, Dow, or S&P 500 could pressure the Nifty 50, especially given FIIs’ bearish positioning.
Domestic Catalysts: Upcoming budget announcements, Q1 FY26 earnings, or macroeconomic data (e.g., inflation, GDP) could trigger volatility.
Expiry Dynamics: As the July expiry approaches, option writers may defend key levels (24,700 put, 25,000 call), leading to choppy price action.
8. Conclusion
The Nifty 50 is likely to trade within a 24,700 - 25,100 range in the near term, with a mild bearish bias due to FII selling and global market weakness. Key support levels at 24,700 and 24,500 are critical to watch, as a breach could signal a deeper correction to 24,200. Conversely, a breakout above 25,150 could target 25,500.
Traders should monitor FII/DII flows, global indices, and options OI for directional cues, while employing risk management strategies to navigate potential volatility.
Anish Jagdish Parashar
Indirect tax india research
Disclaimer: This analysis is based on the oi data and general market principles. Actual market movements may vary due to unforeseen events. Traders should conduct their own research and consult financial advisors before making trading decisions.
Data Source: National Stock Exchange (NSE)
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